What Is Chapter 7 Bankruptcy?
If you aren’t able to keep up with credit card and loan payments, then filing for Chapter 7 bankruptcy may help. Chapter 7 bankruptcy is an option for consumers who have limited income. If income exceeds the median or you have too much disposable income, you won’t be able to file for this type of bankruptcy. A Chapter 7 means test can determine if you have enough income to repair your debts.
This is a liquidation bankruptcy, which means many of your possessions will be sold to pay existing debts. Only certain possessions with certain dollar limits can be kept. Some of your personal property is exempt. These property exemptions can include homestead, home equity, motor vehicle, personal property, retirement accounts, health aids, and jewelry. There are limits for each category. Married couples that are filing together can typically double the value of exceptions. This type of bankruptcy will have a negative impact on your credit score for 10 years.